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Gold Prices Sink vs. Yen, Jump in USD as Trump Declares ‘Trade War’

March 3, 2018
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GOLD PRICES whipped amid sharp currency swings on Friday as global stock markets fell hard after US President Donald Trump defended plans for stiff tariffs on imports of steel and aluminum into the world’s No.1 economy by declaring that “trade wars are good”.

Proposing 25% tariffs on imports of steel and 10% on aluminum last night, “When we are down $100 billion with a certain country and they get cute, don’t trade anymore,” Trump tweeted on Friday morning.

Having erased the last of 2018’s previous gains to drop back to $1302 by mid-week, the gold price in US Dollar on Friday jumped to $1323 per ounce but held almost unchanged for the day in Euro terms.

The US Dollar meantime rose versus the Chinese Yuan and jumped to 10-week highs against the Canadian Dollar, but it sank versus the Japanese Yen to its lowest level since Trump won the US White House election in November 2016, trading just above ¥105.

Dropping slightly against most major currencies for the week, gold bullion fell hardest against the Japanese Yen – down 2.0% for the week to a 7-month low.

But gold bullion held on track for a weekly price gain versus the Australian and Canadian Dollars, and the UK Gold Price in Pounds per ounce recovered all of last week’s 1.0% drop to touch £960 as British Prime Minister Theresa May prepared to give a heavily trailed speech on the UK’s future trading relationship with Europe, also intended to “bring our country together” ahead of Brexit, now just 12 months away.

Chart of gold priced in US Dollars vs. gold adjusted for US Dollar index, base November 2016.

“New support comes in at $1301.80,” says the latest technical analysis of gold prices from Russell Browne at London market-maker Scotia Mocatta’s New York office, pointing to the  “the 50% Fibo retracement level of the Dec low [to] Jan’ high, which nearly coincides with the 100 Day [moving average].

“Near term resistance [sits] at $1324.60, the 50 Day MA.”

Both Asian and European equities meantime extended Wall Street’s overnight slump following Trump’s proposals, with shares in Japan’s Nippon Steel losing over 4% for the day.

Accused of dumping steel onto world markets, China was in January “strictly forbidden” from adding any new steel capacity by Beijing’s Ministry of Industry and Information Technology, also declaring it would “make sure all outdated steel capacity is eliminated and prevented from reopening.”

China’s total trade balance with the rest of the world has turned negative, as BullionVault noted yesterday, thanks to surging imports of services.

Gold Flirts with $1300 on Solid US, Euro Inflation Data But China's Demand to Buy Supports

March 2, 2018
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BUY GOLD prices in London’s wholesale market erased the last of 2018’s previous 4.9% gain on Thursday, falling back near $1300 per ounce after new US inflation data came in stronger than analysts forecast.
 
The PCE measure of US consumer costs rose 1.7% in January from the same month last year, the Bureau of Economic Analysis reported, holding the same pace of inflation as December.
 
Separate data from the 19-nation Eurozone meantime put inflation in manufactured goods prices at an 82-month high despite a slowdown in input costs, with activity across the world’s largest single currency union remaining “robust”.
 
World stock markets fell again ahead of new US Federal Reserve chief Jerome Powell speaking to lawmakers on monetary policy for the second time this week, potentially “dialling back” his seemingly hawkish tone of Tuesday.
 
Government bond prices rose, pushing 10-year US Treasury yields down to 2-week lows at 2.83%.
 
Two-year yields however held firmer near this week’s 9.5-year highs, offering 2.24% per annum.
 
Trading down to $1305 as the start of New York trading approached, prices to buy gold have lost all but $3 of the New Year’s earlier $60 gains per ounce, retreating as the Dollar rallied from multi-year lows on the currency market.
 
Platinum fell harder still on Thursday, losing $30 from Monday to hit 3-week lows at $966 per ounce and cut 2018’s gain so far to 4.1%.
 
Silver was little firmer, also trading near 3-week lows at $16.28 but holding 3.9% down from New Year’s Day.
 
Chart of US Dollar silver price. Source: BullionVault
 
Since hitting a 2-year high above $21 when the UK’s mid-2016 referendum on quitting the European Union gave a narrow win to Brexit, silver has now retreated 23% in Dollar terms and almost 30% against the Euro.
 
Gold has meantime lost 5% in Dollars and 14% versus the Euro.
 
“The return of Chinese physical buyers to the market following the Lunar New Year holiday has helped to support gold prices,” says the latest weekly analysis from strategist Jonathan Butler at Japanese conglomerate Mitsubishi.
 
Demand to buy gold via the Shanghai Gold Exchange’s 99.99 Au contract has, over the last week, totalled 93 tonnes says Butler, beating the first week of last Chinese New Year by more than one-sixth.
 
“Average prices are only 2% lower than they were in the equivalent period,” he goes on, “which suggests bargain hunting is not the only story – this bodes positively for demand going forward in what is traditionally a quiet season.”
 
“There was modest demand from onshore Chinese sources [Thursday],” says the latest daily trading note from bullion bar refiners and finance group MKS Pamp. 
 
New data Wednesday showed that while China’s trade surplus on goods grew yet again, its deficit on trade in services widened for the third month running in January.
 
“The deficit stood at about $21.8 billion last month,” reports Xinhua of the state data, “up from $20.6 billion in December.”
 
Beating the $20.3bn surplus in goods, that made China a net importer overall.
 
“China might face a trade deficit [in goods] in the next five to 10 years,” reported the South China Morning Post in January, quoting former government advisor Zhang Yansheng, now a professor at Renmin University.
 
Neighboring Taiwan – seen as part of China by Beijing but outside Communist control since the end of WWII – should hold a referendum on declaring full and formal independence in April 2019, a group of formerly senior and current politicians said in Taipei on Wednesday.
 
Thursday’s fall in world stock markets saw the EuroStoxx 50 index drop back to unchanged from this time last year, trading more than 6% below its price on 1 March 2015.
 
Germany’s Dax index has now lost 5.9% from the start of February, while Italy’s MIB has dropped 4.7% and Spain’s Ibex index is down 6.5%.
 
Commodities fell as a group for the second day running, pulling Brent crude oil down to $64 per barrel even as wholesale natural gas prices held strong amid Europe’s snow and cold snap.

Gold Prices Steady from Powell's Fed Rate Forecast, Platinum Up 6% for 2018 Despite 'Death Knell for Diesel'

March 1, 2018
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GOLD PRICES steadied at multi-week lows on Wednesday as the Dollar paused its gains but world stock markets followed Wall Street lower after new Federal Reserve chair Jerome Powell told US lawmakers to expect further interest rate hikes.
 
Extending its sharpest 1-week drop of 2018 to date, gold fell another $20 per ounce between Tuesday morning and the end of London trade yesterday, bouncing off a 2-week low of $1314 overnight.
 
Wednesday saw the metal hold little changed at $1318 as commodities rallied with major-economy bond prices, edging longer-term interest rates lower.
 
Giving what journalists called “a markedly bullish assessment of the US economic outlook” in his first testimony to the House financial services committee in the role of Fed chief, “My personal outlook for the economy has strengthened since December,” Powell said on Tuesday.
 
“Some of the headwinds the US economy faced…have turned into tailwinds.
 
“The [Fed] will continue to strike a balance between avoiding an overheating economy and bringing price inflation to 2% on a sustained basis.”
 
Headline US inflation in the cost of living has now exceeded the Fed’s 2.0% annual target every month since September, matching the start of 2017 as the longest such stretch since 2011-2012.
 
Two-year US Treasury yields rose Wednesday to new 9.5-year highs at 2.27%, but longer-term 10-year yields edged back below 2.89% after failing to breach last week’s 4-year high of 2.94%.
 
Chart of gold priced in Dollars vs. 2-year and 10-year US Treasury bond yields. Source: St.Louis Fed
 
“Equities and risk assets may wobble as yields rise, but stronger growth should be good for corporate earnings,” says asset-management giant BlackRock.
 
Providing the Fed doesn’t raise rates more than expected, says Italy’s UniCredit bank, “we do not believe that his testimony threatens to derail risk appetite, at least not in a sustained way.”
 
The Euro currency also held little changed from yesterday’s sell-off versus the Dollar, trading near 3-week lows at $1.22
 
The UK gold price in Pounds per ounce meantime rose back above last week’s closing level to trade at £953 as the minority Government of Prime Minister Theresa May rejected a European Union proposal that Northern Ireland remain inside the EU’s single market to avoid a ‘hard border’ with the Republic following Brexit next spring.
 
Sterling has now lost 5% from January’s spike back to Dollar levels not seen since mid-2016’s UK referendum on quitting the EU.
 
Overnight in Asia, gold premiums in India – allowing for its 10% duty on gold shipments – rose to $1.50 per ounce above London quotes in the key wholesale hub of Ahmedabad, the highest incentive this month for new imports to the No.2 consumer nation.
 
Gold premiums in Shanghai in contrast held flat as Yuan prices fell in lock-step with global Dollar quotes, keeping the incentive for new imports to No.1 consumer China around $8.25 per ounce, almost 10% below average levels.
 
Silver outpaced gold’s rebound versus the Dollar, cutting its loss for the week so far to less than 10 cents at $16.45 per ounce.
 
Platinum prices in contrast held sharply lower after the German courts ruled Tuesday that cities in Europe’s largest national economy can ban older diesel-engine vehicles, “sound[ing] the death knell for diesel vehicles in Europe with heavy losses for owners and carmakers,” according to newspaper Handelsblatt.
 
With platinum finding over 40% of its end-use demand from diesel autocatalysts – needed to reduce harmful engine emissions – “Ultimately, this creates another headwind for the platinum price,” says specialist consultancy Metals Focus.
 
“It must already contend with largely unsupportive supply and demand and therefore a growing physical surplus.”
 
Now down 4.8% from late-January’s 11-month higher however, platinum prices remained 6.1% higher for 2018 so far as New York trading opened on Wednesday.

Gold Price Falls as Fed's Powell Speaks, US Data Miss Badly, Euro Confidence 'Elevated'

February 28, 2018
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GOLD PRICES fell as new US Fed chair Jerome Powell began his first testimony to lawmakers on Tuesday, retreating to last week’s closing level as the US Dollar rallied from a fresh drop on the currency market.
 
New data meantime missed analyst forecasts, showing the US trade deficit in goods widening badly even as orders for larger domestic applicances and other durable goods sank 3.7% from the month before, led by a hard drop in vehicle demand.
 
“Investors will be keen to hear what Powell has to say particularly over the [Fed] balance sheet and his views on inflation,” reckoned Australian bank ANZ’s analyst Daniel Hynes earlier today.
 
Overnight in Asia the Chinese Yuan gapped higher versus the Dollar, halving the last 3 weeks’ retreat from its highest levels since 2015’s sudden devaluation by Beijing.
 
Looking at the Japanese Yen, “A break below ¥107.00 for USD/JPY leading into the Shanghai open gave the yellow metal a boost toward $1335,” says today’s bullion trading note from Swiss refining and finance group MKS Pamp.
 
With the Dollar then seeing “further weakness” against the Chinese Yuan, “Firm interest on the Shanghai exchange kept bullion buoyant at a $7 on-shore premium relative to London pricing,” MKS’s trading team goes. 
 
Having shown its strongest and longest positive correlation the Yen’s exchange rate against the US Dollar in 2017, gold today fell back with the Japanese currency ahead of Powell’s speech, erasing the last of Monday’s 0.9% gain to trade back at $1329 per ounce.
 
Chart of Dollar-priced gold vs. the Dollar's exchange-rate value in Japanese Yen. Source: St.Louis Fed
 
“Inflationary pressures out of the US are likely to see bullion supported over the medium-term,” says MKS Pamp.
 
“However susceptibility remains [for] a test toward $1305-1310 over the shortterm.”
 
New data Tuesday said inflation has slowed this month in Germany – the Eurozone’s single largest economy, with a trade surplus greater even than China’s in 2017.
 
Retreating to 1.2% annual inflation on this first estimate, Germany’s harmonized index of consumer prices showed its slowest rate of gain since late 2011.
 
German government Bund yields ticked higher today however, edging interest rates higher with US and other major economy bond yields even as European stock markets failed to follow Asian equities higher.
 
Commodity prices also fell alongside Eurozone equities and bond prices, taking Europe’s benchmark Brent crude oil price down near $67 per barrel.
 
Industrial and consumer sentiment in the 19-nation Eurozone slipped in February, new survey data said Tuesday, but economic confidence remains “historically elevated” according to the European Commission.
 
“We think the global economy has room to run,” says investment strategist Tushar Yadava at the iShares ETF division of asset-management giant BlackRock, “but we also think inflation is probably making a comeback.”
 
Echoing a growing chorus of analysis predicting that solid 2018 global growth will see inflation rise, “With all these factors…gold is the hedge, it is the strategic holding to be a diversifier in your portfolio,” Yadava tells ABC News.

Gold Prices Rally from Hard Drop Ahead of US Inflation Data and New Fed Chief Speech

February 27, 2018
Latest News
GOLD PRICES regained half of last week’s losses on Monday morning in London as the US Dollar inched down ahead of US inflation data and the new Fed chief Jerome Powell’s first congressional testimony, writes Steffen Grosshauser at BullionVault.
 
Federal Reserve chairman Jerome Powell will speak about US monetary policy before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Wednesday.
 
After suffering its biggest weekly drop in 2.5 months, gold rose almost 1% on Monday to touch $1340 per ounce before prices edged backed to $1333 as New York trading began.
 
Ahead of Thursday’s key ISM measure of business costs – last reported jumping to the strongest since mid-2011 – the US Dollar meantime lost one third of last week’s 0.9% rally from a 3-year low against other major currencies.
 
US Treasury bond yields eased lower from their recent multi-year highs.
 
“It’s ambiguous what [gold’s] role is as a hedge against inflation, but the thought that it has to go down when rates are going up is not established in any way,” said Carter Worth, head of technical analysis at research and broker-dealer firm Cornerstone Macro, on CNBC’s Futures Now.
 
Hedge funds and other large speculative investors raised their net long positions in Comex gold derivatives last week, according to the latest Commodity Futures Trading Commission (CFTC) data, rebounding to 52% above the long-term average.
 
So-called ‘Managed Money’ speculators in Comex silver contracts, in contrast, cut their bullish bets and raised their bearish bets yet again, holding a net negative position overall as a group for the second week running.
 
Chart of Comex 'Managed Money' net speculative betting on silver prices. Source: BullionVault via CFTC
 
Silver prices rose with gold on Monday, touching 1-week highs against the falling Dollar at $16.76 before easing back 15 cents per ounce.
 
New research from US financial services giant Citigroup forecasts rising global inflation on stronger demand for industrial commodities in 2018, joining last week’s growing consensus among analysts from J.P.Morgan to Macquarie and Fidelity.
 
But “higher inflation could trigger an across-the-board recession” due to lower investment and higher credit costs, warns German-based financial group Deutsche Bank.
 
With European Central Bank president Mario Draghi due to make a speech at the European Parliament on Monday afternoon, Europe’s biggest economy is set to resolve a political deal this week that could ensure current chancellor of Germany Angela Merkel gets a fourth term in office.
 
The Euro climbed 0.3% ahead of today’s New York opening – just 2 cents shy of its recent multi-year high at $1.25 – after Germany’s federal statistics authority on Friday reported the country’s government highest-ever budget surplus since reunification in 1990.
 
On the stock markets, the Europe Stoxx 600 Index jumped to its highest level in more than three weeks and the German Dax advanced 0.3%, gaining alongside most other equity markets in Asia and Europe.
 
“Global growth appetite [versus gold] is okay,” says Singapore-listed bank OCBC’ analyst Barnabas Gan.
 
“[Monday’s rally] is not safe-haven demand per se, but more of a currency influence.”

Gold Bullion Hits Worst 1-Week Dollar Price Drop of 2018, Turkey-US Tensions Worsen in Syria

February 24, 2018
Latest News
GOLD PRICES in the global wholesale center of London headed for the steepest 1-week drop of 2018 so far on Friday, holding a 1.7% loss against a stronger US Dollar as major government bond prices edged higher again from this month’s sharp sell-off, nudging interest rates down.
 
Failing to set a 4-year weekly closing high last Friday above $1354, gold prices today held around $1329 per ounce as the US Dollar retained most of this week’s rally on the forex market.
 
Gold priced in Euro slipped 0.4% for the week to €1080 per ounce, while the UK gold price in Pounds per ounce dropped £10 from last Friday to £950.
 
Tensions between Nato members the United States and Turkey – the world’s 5th largest gold buying nation – meantime worsened further as Ankara said its army bombed a convoy of vehicles from the US-backed YPG Kurdish forces in the eastern Syrian region of Afrin.
 
“The summer will be hot for the terrorist organization and those that support it,” Turkey’s President Recep Tayyip Erdoğan today warned Kurds wanting a united breakaway state across the borders of Turkey, Syria and Iraq.
 
“Some of the forces we are working with in the east [of Syria] we are seeing starting to go to Afrin,” confirmed State Department spokeswoman Heather Nauert yesterday.
 
Asked about the Assad government’s shelling of civilians in the rebel Syrian enclave of Eastern Goutha, “I don’t know what some of you expect us to do,” she told reporters.
 
Commodity prices slipped Friday as European stock markets failed to follow Asian equities higher.
 
With bond prices up, the interest rate offered to new buyers eased back, but the benchmark US 10-year Treasury yield held on track for its highest weekly close since January 2014 at 2.89% per annum.
 
Among gold-backed exchange-traded vehicles, the giant SPDR Gold Trust ETF (NYSEArca:GLD) has expanded by 0.9% as gold prices have held unchanged over the last 8 trading sessions.
 
That has seen the quantity of gold bullion needed to back the GLD’s shares in issue recover 7 tonnes from mid-February’s six-month low of 820 tonnes.
 
Chart of GLD tonnes backing. Source: BullionVault via ExchangeTradedGold
 
The last month’s 3.0% drop in Dollar silver prices, meantime, has seen the giant iShares Silver Trust ETF (NYSEArca:SLV) expand by 0.7% to need 9,806 tonnes of bullion backing.
 
Gold prices in Hong Kong edged 0.5% higher with global Dollar quotes overnight Friday, and wholesale contracts in Shanghai also rallied, rising back towards pre-Chinese New Year holiday levels against the Yuan to hold a $6 premium above London bullion.
 
That’s around one-third below the typical incentive for new bullion imports into China, the world’s No.1 gold consumer nation.
 
“Buying is still fairly light” after the Chinese markets re-opened from the key gold-buying Lunar New Year holiday season on Thursday, says today’s Asian trading note from Swiss refining and finance group MKS Pamp.
 
“Silver is drifting lower also.”
 
“Sentiment is weak” in India, Reuters meantime quotes Mukesh Kothari at wholesaler RiddiSiddhi Bullions in Mumbai.
 
“Since retail demand is weak, jewellers are not in a hurry,” agrees a bank dealer in the city.
 
“They can wait for a price correction,” said a Mumbai-based dealer with a private bank. 
 
Allowing for India’s 10% import duty, gold prices in India’s key hub of Ahmedabad have not traded at a premium to London quotes for the last 8 trading days, the longest stretch since October according to data polled by the NCDEX futures exchange.

Gold Bullion Steadies from Fed Minutes Fall, Banks Tip Commodities vs. Inflation

February 23, 2018
Latest News
GOLD BULLION rallied just $3 off a 1-week low versus the rebounding Dollar on Thursday as world stock markets fell after notes from the Federal Reserve showed the US central bank expects to keep raising its key interest rate in 2018.
 
China’s stock market opened sharply higher on the first trading day of the new Year of the Dog, but Hong Kong fell hard with the rest of Asia.
 
Shanghai’s gold market returned to find global wholesale bullion prices $10 lower from before the Chinese New Year holidays, down at $1324 per ounce.
 
The Shanghai gold premium – offered for metal shipped into the world’s No.1 consumer nation – held around $6 per ounce, one-third below the typical average.
 
European equities also dropped after Wall Street “nosedived” overnight following the release of the Fed’s January meeting minutes, widely read as “pointing to more rate hikes ahead.”
 
“Almost all participants continued to anticipate that inflation would move up to the Committee’s 2.0% objective,” the Fed minutes said, calling “economic growth above trend” and the labor market “strong”.
 
With inflation rising, “bond prices are likely to fall [further] and equities are looking heavy,” says a new report from commodity-broking Australian bank Macquarie, advising that “an allocation to commodities [is] likely to add significantly to a balanced portfolio.”
 
Chiming with analysis from US investment bank J.P.Morgan earlier this week, “Much of the focus is on the benefits of precious metals as an inflation hedge,” says Macquarie, “[but] gradually increasing inflation is also supportive for the industrial commodity complex.”
 
Rather than falling alongside stocks and bonds, “We expect the correlation between commodities and equities, as well as [between] commodities and bonds, to be very low,” the report concludes.
 
Chart of commodity basket's correlation with stocks and with bonds. Source: Macquarie
 
“When inflation is higher and more volatile, as it was in the 1970s,” says analysis from $2.4 trillion asset management giant Fidelity, “the correlation between stocks and bonds increases, because rising inflation negatively affects the performance of both.
 
Alongside commodities, short-duration bonds, real estate, and natural-resource producer stocks, Fidelity adds, gold bullion “has historically been viewed as a store of value relative to paper currencies, which tend to lose value when inflation rises.”
 
With gold falling as bond yields spiked Wednesday, gold’s negative correlation with longer-term interest rates reasserted itself after breaking down in 2018 to date from the strongest inverse relationship in a half-decade.
 
“There’s no way we can afford higher interest rates with this massive budget deficit,” says long-time US asset manager and equity bear David Tice.
 
“Right now one should be concerned with return of principle, not a return on it,” he told CNBC in an interview after the release of the Fed’s minutes on Wednesday.
 
“I think cash, as anaemic as those interest rates are, is a good place to be…I do believe that gold [bullion] and gold stocks represent a phenomenal asset choice.”
 
Silver prices meantime extended the overnight drop and Thursday bounce in gold bullion, rallying 0.6% from 2-week lows against the Dollar to trade at $16.50 per ounce.

Gold Prices 'Hit by Deep Link' to Real Yields But 'Should Gain' on Inflation

February 22, 2018
Latest News
GOLD PRICES struggled to recover from yesterday’s sharp drop against the rallying US Dollar in London on Wednesday, halving last week’s 2.2% gain as world stock markets fell, bond prices steadied and commodities edged higher.
 
Retreating 2.6% from last Friday’s 3-week high at $1361 per ounce, the gold price in Dollar terms has now cut its 2018 gains to date to just 2.2%.
 
Priced in Euros and Sterling gold bullion continues to trade below its New Year opening.
 
Japanese Yen gold prices have slid 2.6% since 1st January.
 
“Inflation has come and it should be good for commodities,” reckons US investment bank and London bullion market-maker J.P.Morgan in a new report.
 
“In fact, metals both base and precious exhibit their best performance (both outright and volatility-adjusted) when inflation has reached the Fed’s 2.0% target and continues rising.”
 
But signs of stronger-than-expected US inflation are widely blamed for driving bond yields higher, and rising interest rates have historically forced gold prices down notes Vivek Dhar, mining and energy analyst at Commonwealth Bank in Australia.
 
After a break in this connection not seen in almost a half-decade on BullionVault’s analysis, “Tuesday’s price move hints at that relationship being revived,” says Dhar, pointing to the stronger link between gold prices and the interest rate offered on longer-term bonds after accounting for inflation.
 
“Gold prices and 10-year US real yields have historically had a tight inverse relationship, which is much stronger than the inverse relationship between the US Dollar and gold prices.”
 
Chart of real 10-year US Treasury bond yields vs. Dollar gold prices. Source: St.Louis Fed
 
The resurgent Assad government of Syria – currently conducting a “catastrophic” bombing of rebel-held Eastern Ghouta – meantime accused neighboring Turkey of “a blatant violation of Syria’s sovereignty” on Wednesday over Ankara’s strikes against separatist Kurds in the Afrin region.
 
Turkish President Recep Tayyip Erdoğan dismissed the matter, saying that the issue of his troops – part of the Nato alliance but actively fighting forces backed by the United States – having to deal with pro-Assad soldiers was “closed for now” after they fired warning shots at an approaching division.
 
Leaked documents from the UK Government in London showed Wednesday that Conservative Prime Minister Theresa May wants a transition period of at least 2 years between March 2019’s Brexit deadline and actually leaving the European Union, longer than the EU is currently offering.
 
Pro-Brexit lobbyists the European Research Group – led by Conservative backbencher Jacob Rees-Mogg – meantime demanded “full regulatory autonomy” for the UK immediately on Brexit Day, with the right to start signing so-called “free trade” deals with non-EU states. https://www.thesun.co.uk/news/5628762/cabinet-stuck-in-deadlock-over-whe…
 
UK exports of gold – out of stockpiles held in the global trading center of London – last year rose almost 10% as imports fell 41% by weight from 2016’s series record.
 
January 2018 saw Swiss exports of gold bullion to Hong Kong and mainland China rise 70% from the same month last year according to analysts at Germany’s Commerzbank, jumping as retailers prepared for the key Chinese New Year gift-giving and holiday shopping.
 
New e-commerce channels are extending the reach and sales of jewelry retailers in the world’s No.1 gold consumer market, reports the Nikkei newspaper.

Gold Prices Find 'Support', Silver 'Improving' as 40% of GLD Held by Institutional Investors

February 21, 2018
Latest News
GOLD PRICES rallied from a brief dip below $1340 per ounce in London trade on Tuesday, rising against a firm US Dollar as New York traders returned from the long Presidents Day weekend.
 
With China’s markets still closed for the New Year of the Dog celebrations, Asian stock markets closed lower while European equities edged higher.
 
Benchmark UK Gilt yields rose above 1.60%, up near their highest since April 2016, as the British Pound fell back below $1.40 against the Dollar – an 18-month high when reached in late-2017 and a level last seen before the mid-2016 shock Brexit referendum result.
 
Offering what he called “reassurance” over the UK’s March 2019 exit from the European Union, the Government’s chief negotiator David Davis today said the country won’t be “plunged into a Mad Max-style world borrowed from dystopian fiction.”
 
Platinum prices meantime held and rose above $1000 per ounce
 
Silver rebounded 1.1% to regain last week’s closing level at $16.66 per ounce.
 
“With China still on leave,” says the latest trading note from Swiss refining and finance group MKS Pamp, “there was little interest in Asia to stop bullion moving through the recent support level of $1345.
 
“[But drops] remain shallow…[and] should we see further Dollar appreciation, expect to see support broadly around $1330-35.”
 
With the bulk of end-2017’s regulatory filings now complete, latest data say that the largest exchange-traded gold proxy – the SPDR Gold Trust (NYSEArca:GLD) – ended last year with institutional and fund investors holding 40% of its shares, the largest proportion since the Brexit referendum shock of mid-2016.
 
Chart of institutional vs. private investor holdings of SPDR Gold Trust (NYSEArca:GLD). Source: BullionVault
 
That contrasts with the largest silver ETF, the iShares Silver Trust (NYSEArca:SLV), which had 16.3% institutional ownership at end-2017.
 
“Silver crossed below the lower level of the Ichimoko cloud,” says a technical analysis from Belgian refining group Umicore.
 
“The next stop might be the support level at $16.35 or the current annual low at $16.13.” 
 
But this is only “a limited pullback,” counters technical analyis from French investment bank Societe Generale, “[and] $16.38-16.20 should contain it.”
 
“Demand and supply fundamentals are improving,” adds SocGen bullion market analyst Robin Bhar, “and we expect demand to exceed supply in 2018, primarily driven by a significant shortfall of primary mine production (down 10%).”
 
“People are scratching their heads wondering why silver isn’t picking up along[side] gold,” says exchange-traded trust fund provider ETF Securities’ Maxwell Gold.
 
“[But] rising global growth is going to have a much bigger impact on silver going forward.”

Comex Silver Speculators Turn Net Bearish, Gold Prices Steady as Russia, Turkey Warn US Over Syrian 'Fire'

February 20, 2018
Latest News
GOLD and SILVER PRICES remained steady on Monday morning in London against a rebounding US Dollar, write Steffen Grosshauser and Adrian Ash at BullionVault.
 
With New York shut for Presidents Day – and ahead of meeting minutes due Wednesday from the US Federal Reserve’s latest policy meeting – global equity markets were mixed as non-US government bond prices fell once more, nudging interest rates higher.
 
Oil prices hit their highest level in nearly two weeks after Saudi Arabia’s energy minister Khalid Al-Falih said producer nations should keep output cuts in place for the whole of 2018 even if that causes a small supply shortage. 
 
Geopolitical tensions meanwhile increased as Russia – the world’s third biggest gold producer – warned the US not to “play with fire” in its “provocative” support for autonomy-seeking Kurds in Syria.
 
Just missing a 4-year weekly closing high on Friday, gold prices started this week at $1346 per ounce.
 
Also firm against the Dollar, silver prices edged higher for UK and Euro investors on Monday.
 
But in contrast to gold’s 3.4% rise for 2018 so far however, silver prices remain almost 1.8% below their New Year 2018 level at $16.66 per ounce.
 
Latest data from US regulators also show speculators turning net negative on the metal in their derivatives betting last week.
 
Chart of Managed Money net betting in Comex silver futures and options, tonnes equivalent. Source: BullionVault via CFTC, LBMA
 
The CFTC’s silver figures say that hedge funds and other Managed Money speculators cut their bullish bets on Comex futures and options and raised their bearish bets as a group in the week-ending last Tuesday.
 
Together that took their net speculative position back into negative territory for the first time so far in 2018.
 
The Managed Money category has been bearish overall on silver in 34 of the 609 weeks since current records began in 2006.
 
That compares with 21 weeks of net bearish betting on platinum and just 12 on gold, which last saw net negative Comex betting by money managers in the first week of 2016.
 
Platinum today further extended its gain above $1000, rallying to a 3.5-week high at $1013 per ounce.
 
Sister metal palladium meantime stayed firm, trading up to $1050 per ounce after its recent 15% correction.
 
Now fighting against Kurdish separatists inside Syria, the government of Washington’s fellow NATO member Turkey – the world’s 5th largest gold buying nation – said at the weekend it’s giving the US “another chance” over its support for a 30,000-strong border protection force in the northeast of Syria.
 
The US meantime said it’s investigating an attack on its Kurdish allies apparently involving Russian mercenaries.
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